Application of Structural Equation Modelling to Assess the Effect of Entrepreneurial Characteristics on Students’ Entrepreneurial Intentions

Entrepreneurship is considered to be an important driver for economic growth. Entrepreneurial intention is, based on the literature, suggested to be a predictor of future entrepreneurial behaviour. Entrepreneurial intention is influenced by several factors including entrepreneurial characteristics. Several studies have examined the relationship between entrepreneurial characteristics and success entrepreneurs. However, there is very little research available on personality factors that drive students' intentions to start a new business. This study investigates the effect of entrepreneurial characteristics of students at Iranian universities on their entrepreneurial intentions. A survey instrument was designed to measure entrepreneurial intentions as dependent variable as well as entrepreneurial characteristics including need for achievement, risk-taking propensity, innovativeness, self-efficacy and need for independence as independent variables. The sample of 346 students included students studying business, agriculture, and engineering at seven established universities at both graduate and undergraduate levels. Structural Equation modelling (SEM) was employed to test causal relationships among independent and dependent variables. The results indicate that entrepreneurial intention is significantly influenced by entrepreneurial self-efficacy and need for achievement. However, risk taking propensity and need for independence. do not have a direct significant impact on students' entrepreneurial intentions. Furthermore, the results show that the effect innovativeness is mediated by entrepreneurial self-efficacy. The results of the study provide educators, administrators and policy makers inside and outside universities valuable insights with respect to entrepreneurship education. It may serve students better by increasing its focus on entrepreneurial self-efficacy and need for achievement